We conduct a meta-analysis of the empirical evidence published in academic journals on value creation through shareholder activism. We collect 1,973 estimates of stock price reactions to activism campaigns from 67 studies. We document substantial publication selection bias in this literature and provide estimates adjusted for the bias. We also examine how estimates of value added are affected by the institutional setting, the identity of activism sponsors, their objectives and approaches, and the characteristics of the data samples and research methods used in the primary studies. We find that most approaches suggest that the value created by shareholder activism is positive, but smaller in magnitude than generally assumed. Adjusting for publication bias, estimates range from 0.000% to 1.473%. We observe greater value creation in environments where shareholders’ rights are better protected and where the total capitalization of the stock market is lower relative to gross domestic product (GDP). Stock markets respond more positively to announcements of activism by individual investors, to those conducted by more confrontational approaches, to those aimed at selling the target company, and to those who ultimately achieve their goals.

Fig: Selective reporting against negative estimates (indicated by funnel asymmetry)

Funnel plot

Reference: Bajzik Josef, Havranek Tomas, Irsova Zuzana, Jiri Novak (2023), "Does Shareholder Activism Create Value? A Meta-Analysis." Charles University, Prague.